2024Sustainability Report
CONTENTS
About this report | 02 | SUSTAINABLE DEVELOPMENT GOALS (SDG) | ||||||
The Stefanutti Stocks Way | 03 | At the United Nations Sustainable Development Summit | ||||||
Group management system framework | 04 | in 2015, more than 150 world leaders adopted a set of goals | ||||||
Company profile | 05 | to end poverty, protect the planet and ensure prosperity | ||||||
for all, as part of a new sustainable development agenda. | ||||||||
Stakeholder engagement | 06 | |||||||
On reviewing its various sustainability initiatives, the | ||||||||
Material risks | 09 | |||||||
group has established a link between what the sustainable | ||||||||
Value-added statement | 10 | |||||||
development goals seek to achieve, the suggested actions | ||||||||
Group performance review | 11 | and some of its current initiatives. Stefanutti Stocks has | ||||||
Energised and engaged employees | 14 | included these goals to ensure they continually guide | ||||||
the company's actions and contribution to the larger | ||||||||
Case studies | ||||||||
world agenda. | ||||||||
- Skills development | 23 | |||||||
- Enterprise development | 25 | |||||||
- Socio-economic development | 28 | |||||||
Socio-economic development (SED) spend | 30 | |||||||
Flawless execution | 34 | |||||||
Case studies | ||||||||
- Environmental | 47 | |||||||
- Environmental and occupational | 49 | |||||||
health and safety | ||||||||
- Occupational health and safety | 53 | |||||||
Client relations | 55 | |||||||
Additional information | 56 | |||||||
Abbreviations and definitions | 64 | |||||||
Corporate information | 65 | |||||||
MORE INFORMATION
Sustainable development goals can
be found on the United Nations website:
https://sdgs.un.org/goals
Stefanutti Stocks Sustainability Report 2024
01
ABOUT THIS REPORT
SCOPE AND BOUNDARY
This sustainability report comprises the operations of Stefanutti Stocks Holdings Limited and its subsidiaries (the company, the group or Stefanutti Stocks) mainly for South Africa. The information in this report covers the performance of the company for the year ended 29 February 2024 and, where relevant, information post year-end has been incorporated.
Stefanutti Stocks strives to ensure that the disclosures made in this report are meaningful, accurate, complete, transparent and balanced. The board and board committees have considered and approved the disclosures made in this report.
This report was prepared in accordance with the following key reporting frameworks:
- The South African Companies Act, No. 71 of 2008, as amended (the Companies Act),
- The Listings Requirements of the JSE Limited (JSE),
- The principles of the King IV Report on Corporate Governance™ (copyright and trademarks are owned by the Institute of Directors in Southern Africa NPC and all of its rights are reserved) for South Africa 2016 (King IV™),
- The International Integrated Reporting Council's International Framework, and
- The company's Memorandum of Incorporation (MOI).
This report also takes guidance from the Global Reporting Initiative Guidelines and Standards.
The Stefanutti Stocks Integrated Annual Report, as well as the consolidated annual financial statements and investor presentations for the year ended 29 February 2024, are available on the company's website.
The requirement for external sustainability assurance is considered annually and is, at this stage, not deemed necessary.
This report contains material issues of concern to the company's stakeholders. For additional information visit the company's website www.stefanuttistocks.com.
MATERIALITY
Materiality is determined after consideration of the International Framework, King IV™, the Global Reporting Initiative Guidelines and Standards and internal policies.The group defines material issues as those matters having the potential to affect its strategy, business model, sustainability or one or more of the capitals, namely: financial, manufactured, intellectual, social and relationship, human and natural capitals, as defined by the International Integrated Reporting Council (IIRC) over the short, medium and long term, taking into account the likelihood and consequence of the issues.
FORWARD-LOOKING STATEMENTS
The statements made within this sustainability report may contain forward-looking information, including statements regarding the company's intent, belief or current expectations with respect to Stefanutti Stocks's businesses and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices.
Investors/shareholders are cautioned not to place undue reliance on these forward-looking statements. Forward- looking statements are based on Stefanutti Stocks's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements.
These statements are based on a number of assumptions that are subject to change. This sustainability report includes only matters up to the date of this report and the period reported on and only where relevant, information post year-end has been incorporated. Stefanutti Stocks disclaims any duty to update the information herein.
Busisiwe Silwanyana
Chairman of the Social and Ethics Committee 18 June 2024
Stefanutti Stocks Sustainability Report 2024
02
Founders Mentality | Client Relationships | ||||
Owner's mindset: all employees are so invested, | Client centric: we create the best | ||||
that they feel and act like owners. | experience for clients, through focused | ||||
Frontline obsession: all employees are driven to | and continuous engagement. | ||||
support the success of our construction sites. | Solutions driven: we assist clients | ||||
Agility: we make good decisions, adapt to | by creating value and helping them | ||||
change quickly, reduce bureaucracy. | solve problems. | ||||
Resilience: we deal with difficulties | |||||
and challenges, bounce back in the | |||||
face of adversity, and never | |||||
give up. | |||||
Flawless Execution | Energised & Engaged Employees | ||||
Accountability: we are personally | Our people, our family: | ||||
responsible for our performance/ | our colleagues are our family, | ||||
outcomes in delivering excellence. | they are the differentiator. | ||||
Professionalism: our employees are | Servant leadership: our leaders | ||||
competent, disciplined, reliable | and managers are responsible to help | ||||
and meticulous. | employees learn, grow, and perform to | ||||
Innovation: we use new processes/techniques/ | their full potential. | ||||
ideas and seek continual improvement. | Celebrate our success: we celebrate | ||||
Stakeholder alignment: we develop and | victories, recognise excellence, show | ||||
maintain a common understanding (in the best | appreciation and provide motivation. | ||||
interest of our projects) amongst clients, vendors | Hire and develop the best people: | ||||
and communities. | we employ, grow and promote the best. |
Stefanutti Stocks Sustainability Report 2024
03
GROUP MANAGEMENT SYSTEM FRAMEWORK
EXECUTIVE COMMITTEE(EXCO)
Various forums have been established to ensure standardisation across the group and improve the group's effectiveness, including the Sustainability Committee, which oversees the composition of this report.
Stefanutti Stocks Sustainability
SUSTAINABILITY
Chairman - Mike Sikhakhane
To formalise, entrench, maintain and review a reporting system that enables the group to measure, understand and communicate its progress against the five key areas of sustainability: economic, environmental, social, transformation and governance to its stakeholders.
HUMAN RESOURCES
Chairman - Mike Sikhakhane
To ensure that services, policies, procedures, conditions of employment and human resources programmes exist in support of the group's attraction, development and retention of employees as well as sound human resources governance, risk and compliance management.
INFORMATION TECHNOLOGY
Chairman - Richard Harrison
To ensure the information and communication technologies (ICT) utilised support and enable the group's objectives. This entails the identification and assessment of potential emerging technologies and the ongoing drive to reduce the overall ICT cost per user within the group. These activities cover both purchased and in-house developed software, as well as potential hardware and cloud solutions.
- OCCUPATIONAL HEALTH, SAFETY, ENVIRONMENT AND QUALITY
Chairman - Eric Wisse
To continually improve upon a well-established environmental management system (EMS), occupational health and safety management system (OHS MS) as well as quality management system (QMS) to ensure effective core processes.
Continual review of these management systems to ensure efficiency and simplicity in the implementation and maintenance of new and existing projects. A centralised hub of procedures and documentation, as well as a constructive Safety, Health and Environmental (SHE) and Quality Forum to monitor, measure, analyse and evaluate core processes in the interest of advancement. The development of safety, health, environmental and quality (SHEQ) processes, templates and requirements on the Systems at Stefanutti Stocks (S@S) will enable electronic functionality of the above management systems and reduce the need for arduous and variable administrative activities. Built-in tracking systems are included
to ensure processes are followed, and corrective actions are implemented and measured for effectiveness.
FINANCE
Chairman - Yolanda du Plessis
To coordinate regulatory and administrative compliance within the group and to share best practices.
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04
COMPANY PROFILE
Stefanutti Stocks is a multidisciplinary construction group that delivers projects, of any scale, to diverse sectors in the built environment. The group's geographical footprint spans South Africa and sub-Saharan African countries where its mission is to deliver exceptional engineering solutions that enrich people's lives.
VISION
Re-engineering the built environment.
MISSION
A multi-disciplinary construction group delivering exceptional engineering solutions that enrich people's lives.
Stefanutti Stocks's broad spectrum of expertise covers traditional and niche construction, including:
- Building (specialising in the Industrial and Commercial sectors including one-stop design and build of cold room facilities and the complete data centre offering encompassing Civil Structural Architectural (CSA), Mechanical Electrical Piping (MEP), 3D modelling, etc.).
- Civils (including the Structural Rehabilitation and Water sectors).
- Geotechnical (including lateral support and piling).
- Roads, Earthworks and Mining infrastructure.
- Renewable Energy infrastructure (including both civil and electrical balance of plant projects).
- Electrical & Instrumentation (including the design and build of electrical step-down facilities).
- Mechanical (including industry-leading, turnkey dirty water clarification solutions (S&P High-Rate Clarifier (S&P HRC)).
- Oil & Gas (including in-housepipe-spool fabrication and bulk tank construction).
- Mining Services (including materials handling and tailings management).
Stefanutti Stocks is registered with the Construction Industry Development Board (CIDB) as a Category 9 Contractor, with no restrictions on the size of projects for which the group can tender. The group is ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 27001:2022 certified.
Stefanutti Stocks is one of South Africa's leading engineering and construction groups and is listed on the JSE Main Board in the "Construction and Materials
- Construction" sector.
OPERATIONAL FOOTPRINT
The group's operational footprint on the African continent spans South Africa and sub-Saharan Africa, including Botswana, Eswatini, Mauritius, Namibia, Zambia and Zimbabwe in both the private and public sectors.
Clients include governments, state-owned companies, local authorities, large industrial entities, mining corporations, financial institutions and property developers.
The group's workforce is 5 413 including 3 100 South African employees, with its head office based in Kempton Park, Gauteng.
The group has a values-driven culture which underpins sustainable partnerships with all stakeholders.
The above is achieved by setting and meeting measurable key objectives to support sustainable earnings growth and, at the same time, maintaining a sound financial position while implementing key non-financial objectives to support the group's strategy.
Regional operations in Africa
Shaded countries on the map indicate the group's operational footprint
Inland Coastal
Western Cape Africa
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STAKEHOLDER ENGAGEMENT
Stefanutti Stocks has a stakeholder policy which provides a clear and structured framework on how the group identifies, engages with, and responds to the needs and expectations of its stakeholders.
Stakeholders are defined as individuals, groups, or institutions with a material interest in or the ability to significantly influence Stefanutti Stocks' operations, either positively or negatively. This encompasses a diverse range, including employees, suppliers, local communities, enterprise development (ED) partners, trade unions, clients, regulatory bodies, shareholders, investors and lenders.
The Social and Ethics (S&E) committee further monitors the effectiveness of the group's stakeholder engagement processes by reviewing feedback received from management regarding employee engagement surveys, client satisfaction surveys, compliance matters as communicated by regulatory bodies, positive feedback from investor and shareholder presentations and successful outcomes from negotiations with the Lenders. These reviews are a standard agenda item at each S&E committee meeting and any concerns
are addressed with the management team.
Stakeholder relationships are discussed in more detail below.
EMPLOYEES
The group's interaction with employees provides feedback that is shared throughout the business. To meaningfully engage with employees, various formal and informal methods have been implemented by management
on a continuous basis.
Engagement with employees continues for the duration of the employment cycle. After recruitment and appointment into the group, the next engagements occur at monthly group induction sessions. Recruits gain a broad understanding of the group, its internal organisational structure, basic policies and procedures, and the various benefits enjoyed by employees. The sessions also act as an introductory discussion when selecting a benefit fund best suited to the employee.
Functional forums are part of the group's formal structures of employee engagement and communication. Forum members include business representatives and subject matter experts with the knowledge and experience to inform the group's internal functions on matters of business strategy and standard policies and procedures. Similar forums exist on a smaller scale within each region and discipline.
At scheduled employee connect sessions, employees can discuss matters including personal development and training, performance and career path progression. The outcomes of these engagements help guide the succession and training plans of the group.
The group's leadership engagement (LE) and visible felt leadership (VFL) initiatives demonstrate its progressive approach towards health and safety. The group promotes greater personal involvement, acceptance and responsibility among employees. This is a shift from the previous approach of compliance and hard-lined management control to a behavioural based approach.
These initiatives provide two-way communication opportunities allowing employees to contribute to problem solving, while also giving a better understanding of any concerns that are raised.
The group's employee engagement surveys include focus areas such as employee satisfaction with the company, their jobs, colleagues and communication, among others. Employees received feedback from the survey with solutions being drawn from their own suggestions. The results of this year's employee engagement survey showed a marked positive improvement in all focus areas together with an improved overall engagement score when compared to the international benchmark.
When employees leave the group, they are encouraged to attend an exit interview and, where necessary, further engagement opportunities are arranged to address issues raised.
- The current and future focus areas for employees are disclosed on page 14 and 16.
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STAKEHOLDER ENGAGEMENT CONTINUED
ENTERPRISE DEVELOPMENT PARTNERS
Stefanutti Stocks recognises the value of enterprise development (ED). The group ED strategy is to facilitate and maintain solid working relationships with capable black-owned companies, as either suppliers or contractors, or both. The aim is to develop them in a measurable and meaningful way, and to guide their future sustainability, while enabling them to execute and deliver larger, more challenging projects.
Stefanutti Stocks Sustainability
LOCAL COMMUNITIES
Local communities play a vital role in ensuring that project delivery is successful. The success or failure of a project is reliant on upfront engagement with the local community. This process helps to create a better understanding of the community's expectations, while creating a sense of ownership and transparency by involving locals in decision-making and procurement.
Community Liaison Officers (CLO) are employed by the group to communicate daily with local community leaders, assist with recruitment requirements and act as community spokespersons. The communities have intimate local knowledge and a unique relationship with their respective environments. CLOs assist communities by creating a platform whereby stakeholders can have their questions answered and voice any concerns they may have.
Where communities have been properly engaged, community members become the company's greatest brand ambassadors, promoting the shared interest in being considered for future work and finding opportunities for new/additional work in those regions.
The group also fosters its relationship with the community through various socio-economic development (SED) initiatives.
The current and future focus areas for local communities continues to be effective engagement with communities through CLOs and focused investment in relevant SED initiatives.
SUPPLIERS
Suppliers and vendors are important stakeholders, and the group focuses on enhancing and developing these key relationships.
The group promotes open channels of communication and engagement with suppliers. To enhance and streamline interaction between the company, staff and suppliers, open and honest feedback is encouraged.
- The key focus areas for suppliers are disclosed on page 46.
Collaboration between regional management teams and group support services helps to identify and select ED partner beneficiaries via the new entrant selection process. This process ensures that potential ED partners are objectively and thoroughly assessed to align the developing enterprise with the group. A multi-phase process takes a holistic approach, ranging from document compliance reviews to psychometric testing.
The current and future focus areas for ED partners remains the measurable and meaningful development of their businesses.
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STAKEHOLDER ENGAGEMENT CONTINUED
TRADE UNIONS
The main role of trade unions is to ensure the welfare of its members. This includes safeguarding the interests of its members, protecting the reliability of its trade, and achieving higher wages by securing economic benefits. Trade unions are recognised within the 1996 Constitution of South Africa, which provides for the right to join trade unions, and for unions to collectively bargain and strike. This is embodied by the Labour Relations Act, which sets out the working framework for both unions and employers.
In addition, three institutions were established to further the goals of reducing conflict in industrial relations, eliminating unfair discrimination and redressing past discrimination in the workplace. These are the National Economic Development and Labour Council (NEDLAC), the Labour Court, and the Council for Conciliation, Mediation and Arbitration (CCMA). A total of five (2023: five) trade unions operate within the group for whom stop order facilities are in place. In certain regions, some unions represent the majority of employees, which allows them to benefit from certain rights such as having a full-time Shop Steward employed by Stefanutti Stocks.
The current and future focus areas for trade unions includes active participation and engagement with the relevant industry associations.
CLIENTS
Stefanutti Stocks believes that effective client engagement serves as a cornerstone to successful projects. Engaging clients is pivotal in fostering collaboration, managing expectations, and ensuring project alignment. Implementation of the "Client Engagement" platform, with feedback captured and addressed, has been successful on previous and current projects, adding great value to securing future business.
The group's multifaceted process of engagement entails transparent communication, active involvement in decision- making processes, and responsiveness to feedback throughout the project lifecycle. By prioritising client engagement in its construction activities, the group can mitigate risks, and ultimately deliver outcomes that resonate with all stakeholders.
- The current and future focus areas for clients are disclosed on page 55.
THE JSE, INDUSTRY BODIES AND GOVERNMENT REGULATORS
Compliance with the JSE Listings Requirements and the Companies Act is monitored by the company secretarial and finance functions. These functions also monitor the group's application of King IV with various board committees providing oversight.
The current and future focus areas for regulatory bodies continues to be compliance with issued regulations.
SHAREHOLDERS AND INVESTORS
The group mainly interacts with shareholders and investors though announcements released on the JSE's Stock Exchange News Service (SENS). These communications inform stakeholders of the group's financial results as well as other relevant financial or regulatory matters. Material shareholders are proactively engaged by the CEO and CFO before each Annual General Meeting (AGM) to ensure their attendance and participation.
Other forms of communication include the circulation of year-end and interim financial results and reports, group presentations and region-specific site visits and meetings.
The executive directors deliver presentations on the group's performance and strategic progress to employees, the media, institutional investors and financial analysts.
The company provides general company information via presentations, corporate actions and financial results, as well as information concerning its management, history, operations and various other matters of interest via the company's website.
The current and future focus areas for shareholders and investors remains the provision of timely and accurate financial and other related information.
LENDERS
Headed by the Chief Restructuring Officer (CRO), the Restructuring Implementation Team continues to advise on and assist with the implementation of the group's Restructuring Plan as amended from time to time.
At monthly Lender Group meetings, Stefanutti Stocks engages with the Lenders, and the following is assessed and discussed:
- performance against the Restructuring Plan;
- actual and forecast cash flows;
- trading results;
- future prospects; and
- other issues relating to the Restructuring Plan.
The group envisages that this process will continue until June 2025.
The current and future focus areas for Lenders continues to be upholding the commitment to the Restructuring Plan and adherence to the funding arrangements of the loan.
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MATERIAL RISKS
As a South African construction group, it is important to understand the impact of material risks on the business and the communities living in areas in which it operates.
Material risks can range from environmental concerns and labour practices to community engagement and ethical business practices. Material risks refer to events that could have a significant impact on the group's performance, reputation, and ability to create long-term value for stakeholders. The group performs a comprehensive overview of the material risks that will affect the group, how they are addressed and the progress made in mitigating any potential negative impacts. By prioritising these material risks and addressing them in a transparent and responsible manner, the group ensures its long-term sustainability and success. The group identifies its material risks through the following process:
Stefanutti Stocks Sustainability
1 ▶
IDENTIFY KEY
STAKEHOLDERS
The first step is to identify the group's key stakeholders, including clients, suppliers, employees, shareholders, lenders, regulators and communities. These stakeholders may have different perspectives and priorities, and it is important
to understand their expectations and concerns.
2 ▶
CONDUCT A
MATERIALITY ASSESSMENT
A materiality assessment is performed to evaluate the impact and importance of various events on the group and its stakeholders. This is done through surveys, interviews, focus groups, and other forms of engagement.
The assessment considers both the potential risks and opportunities associated with each event.
3 ▶
PRIORITISE
MATERIAL EVENTS
Based on the results of the materiality assessment, the group prioritises the material events that are most significant to its business objectives and stakeholders. A ranking system is used, covering the inherent risk of each such event, the proposed actions (mitigants and controls) taken
by management to either transfer, avoid, accept, reduce or eliminate the identified risks. The risk that remains after all reasonable efforts have been made to reduce or eliminate the inherent risk (the residual risk) is then ranked from high to low.
4 ▶
DEVELOP A STRATEGY TO ADDRESS MATERIAL RESIDUAL RISK
Once the material residual risks are identified, prioritised and ranked, the group develops
a strategy to address each material individual residual risk. This involves setting targets, developing policies and procedures, and allocating resources to specific initiatives. The strategy also includes a plan for monitoring and reporting on progress made.
5
REVIEW AND
UPDATE REGULARLY
Material inherent and residual risks can change over time. These are reviewed and updated on a regular basis, through ongoing engagement with stakeholders and monitoring external trends and developments.
Report 2024
For a detailed register of all the group's material risks, please refer to page 14 of the Stefanutti Stocks Integrated Annual Report 2024, which is also available on the website.
09
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Stefanutti Stocks Holdings Limited published this content on 27 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 June 2024 12:10:49 UTC.